Ben Horowitz: DFJ Entrepreneurial Thought Leaders Series

Ben Horowitz: DFJ Entrepreneurial Thought Leaders Series

Ben Horowitz is the co-founder and general partner at Andreessen Horowitz, the author of the best sellingThe Hard Thing About Hard Things, and one of Silicon Valley's most respected and experienced entrepreneurs. Earlier today, he spoke at Stanford as part of the DFJ Entrepreneurial Thought Leaders Series. We've highlighted the key points below.

On people skills

Having good people skills is very underestimated.

Good people skills allow you to see things from other people’s perspective (extremely valuable).

When CEOs make decisions, they have to consider how every single person in the company will perceive it and the decision should be made with that context in mind.

On working at big companies

There is value in working at big companies when you're right out of college.

You gain life experience and know more about the world.

For good or bad, you’ve seen how a large company operates and how decisions get made.

It is very difficult to start a company with no management skills or the network (this is where A16Z comes in).

The Hard Thing About Hard Things

When Ben was CEO of LoudCloud/Opsware, he saw how hard it was to be CEO.

Ben read a bunch of management books, and none of them helped.

Management books teach you how not to screw up your company when things are going really well.

How to lay off 80% of your workforce is not the kind of thing that gets talked about in management books (readBen's book.).

People give you obvious advice that you can’t really use like “hire A players” (ok, but how do you hire A players? When the A player wants to leave how do you get them to stay? When the A player wants a raise and you know they deserve it, do you give it to them? When other employees find out -- and they always do -- does that mean you give a raise to the next person that asks?).

Difference between peacetime/wartime CEO is the decision making process.

Management literature is almost entirely made for peacetime CEOs (written by consultants who study successful companies in their time of peace).

In peacetime, you can afford to do things outside of your core mission (Eric Schmidt was a peacetime CEO at Google, employees were required to take 20% flex time).

In wartime, you can’t afford to do anything outside the core mission when you have three week’s worth of cash left, which means that wartime CEOs have to do more of the decision making themselves, make quick decisions, must get them right, etc.

CEO is usually the one with the experience and authority to be decisive and make the hard decisions quickly.

A16Z

Ben came up with ‘A16Z’ (the number of letters between the A and the Z in Andreessen Horowitz).

A16Z started 5 years ago with a $300 million fund (now managing $4.7 billion).

The founder is essential to any long-lasting tech company, but the Silicon Valley way of doing things was replacing the founder with a "professional CEO." Why is that?

So Marc and Ben decided to start A16Z, a VC firm that puts the founder first.

It is easier to teach a technical founder management skills than teaching a professional CEO how to innovate.

Two main advantages of having a professional CEO is having operating experience and a 'professional CEO network' (industry, recruiting, press, etc.).

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